• Miami plans to give out cryptocurrency funds to city residents with the city earning over $21 million in the past three months through its investment in MiamiCoin.
  • Critics see it as a needless cash grab and an investment in highly volatile assets that could end up leaving a big hole in the city’s budget.
  • CityCoin is expanding to New York, with the mayor announcing a similar operation to Miami. They dream of replacing taxes with cryptocurrency.

Miami mayor Francis Suarez has announced on Twitter that he plans to give out cryptocurrency funds to city residents.

The funds are earnings the city has made through MiamiCoin, a “CityCoin.” In simple terms, the return came from the city investing some of its funds in MiamiCoin, earning over $21 million in the past three months, CoinDesk reports. That’s on track to earn roughly one fifth of what Miami makes through taxes in a year.

“We’re going to be the first city in America to give a bitcoin yield as a dividend directly to its residents,” Suarez told CoinDesk on Thursday.

Mayor Francis Suarez of Miami speaks during a press briefing accompanied by Mayor Mike Duggan of Detroit and White House Press Secretary Jen Psaki at the White House in Washington, U.S., February 12, 2021. REUTERS/Carlos Barria
Miami mayor Francis Suarez has announced that he plans to give out cryptocurrency funds to city residents.
Image: REUTERS/Carlos Barria

Residents are also able to mine or buy the coin directly from the city — a simple way for cities to make an extra buck using blockchain technology.

But critics see it as a needless cash grab and an investment in highly volatile assets that could end up leaving a big hole in the city’s budget.

Tax can

The mayor has huge hopes for the coin. Suarez argued that MiamiCoin could eventually even eliminate the need for residents to pay taxes.

“You could theoretically at one point pay the entire tax revenue of the city and the city could be a city that runs without taxes, which I think would be revolutionary,” he told the outlet.

Residents will have to get a digital wallet to receive their payments from the city. The wallet is designed to work with several different crypto exchanges, but it’s up to residents to jump through those hoops.

CityCoin recently announced that it’s also helping New York City mayor Eric Adams launch a similar coin for the Big Apple, called NYCCoin.

What is the World Economic Forum doing about blockchain?

Blockchain is an early-stage technology that enables the decentralized and secure storage and transfer of information and value. Though the most well-known use case is cryptocurrencies such as bitcoin, which enable the electronic transfer of funds without banking networks, blockchain can be applied to a wider range of purposes. It has potential to be a powerful tool for tracking goods, data, documentation and transactions. The applications are seemingly limitless; it could cut out intermediaries, potentially reduce corruption, increase trust and empower users. In this way, blockchain could be relevant to numerous industries.

That said, blockchain also entails significant trade-offs with respect to efficiency and scalability, and numerous risks that are increasingly coming to the attention of policy-makers. These include the use of cryptocurrency in ransomware attacks, fraud and illicit activity, and the energy consumption and environmental footprint of some blockchain networks. Consumer protection is also an important and often overlooked issue, with cryptocurrency, so-called “stablecoins” and decentralized applications operating on blockchain technology posing risks to end-users of lost funds and also risks to broader financial stability depending on adoption levels.

Read more about the work we have launched on blockchain and distributed ledger technologies – to ensure the technology is deployed responsibly and for the benefit of all. We’re working on accelerating the most impactful blockchain use cases, ranging from making supply chains more inclusive to making governments more transparent, as well as supporting central banks in exploring digital currencies.

“In New York we always go big, so I’m going to take my first THREE paychecks in Bitcoin when I become mayor,” the mayor-elect tweeted last week. “NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!”

New York residents weren’t exactly impressed by Adam’s actions.

“This city doesn’t need to be the center of an industry of scammers, pyramid schemes, and empty promises,” Polygon video producer Simone de Rochefort tweeted in reply.